Copyright 2000 / Los Angeles Times
Los Angeles
Times
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September 1, 2000, Friday, Home Edition
SECTION: Part A; Part 1; Page 1; National Desk
LENGTH: 829 words
HEADLINE:
PRESIDENT VETOES ESTATE TAX REPEAL; OVERRIDE IS VOWED;
LEGISLATION: CLINTON SAYS THE GOP MEASURE IS UNFAIR AND TOO COSTLY.
REPUBLICANS PLEDGE TO TAKE UP THE FIGHT AFTER CONGRESS RETURNS NEXT WEEK. STAGE
IS SET FOR A BITTER BATTLE.
BYLINE: ROBERT A.
ROSENBLATT and RICHARD SIMON, TIMES STAFF WRITERS
DATELINE: WASHINGTON
BODY:
Mocking the Republican bill to repeal the estate tax as a doomed "snowball
in August," President Clinton vetoed the measure Thursday, setting the stage for
a bitter election-year battle over how to use the massive budget surpluses the
country will enjoy in the coming decades.
GOP leaders promised their
first major task when Congress returns from a monthlong recess next week will be
an attempt to override the veto.
"Apparently, even death can't protect
you from the Clinton-Gore administration's insatiable desire for higher taxes,"
said Senate Majority Leader Trent Lott (R-Miss.), demonstrating some of the
high-pitched rhetoric that marks the fierce debate.
The differences
between the two parties are crystallized in the tax issue. Texas Gov. George W.
Bush declares that Republicans will bring tax relief to hard-pressed Americans.
Vice President Al Gore and his fellow Democrats denounce the estate tax
repeal and other Republican tax cut proposals as giveaways to the
wealthiest citizens.
The federal inheritance tax, dubbed the "death tax"
by the Republicans, applies to estates worth more than $ 675,000 for an
individual. The tax rate ranges from 37% to 55%, depending on the size of the
estate. The $ 675,000 exemption is scheduled to rise to $ 1 million by 2006.
The bill passed by the House and Senate would eliminate the tax in
stages, starting next year, with complete repeal by 2010.
The latest
available Internal Revenue Service data, from 1997, show that 43,000
estates--out of a total of 2.3 million--paid some inheritance taxes.
Repeal would cost the Treasury $ 105 billion in the first 10 years as
the tax is gradually withdrawn, and then $ 750 billion over the next 10 years
after repeal is complete.
The repeal bill "is wrong on grounds of
fairness. It is wrong on grounds of fiscal responsibility," Clinton said in the
East Room of the White House, where he announced the veto. "We are not against
wealth and we are not against opportunity," the president said. "If I were
against creating millionaires, I have been an abject failure in my eight years
as president," he said, jokingly.
The White House claims the super-rich
would get the most help, with 50% of the benefits going to just 3,000
families--who would enjoy an average tax savings of $ 7 million under the GOP
legislation.
But Republicans say the estimates are misleading and
contend that many owners of small businesses and family farms are threatened by
the tax. Clinton's veto "disappointed millions of Americans who worry that a
lion's share of their life's work will be passed on to the Internal Revenue
Service rather than to their families," said House Speaker J. Dennis Hastert
(R-Ill.), who promised a vote next week to override the veto "as our first
priority."
Bob Stallman, president of the American Farm Bureau
Federation, criticized the veto as a "a blow to America's hard-working farmers
and ranchers."
The estate tax repeal is one of several
measures passed by the Republican-controlled Congress over the vociferous
opposition of Clinton. He already has vetoed a bill to reduce taxes on married
couples. He also opposes two other key measures approved by Congress: a bill
cutting taxes paid by some Social Security beneficiaries and one allowing
increased contributions to individual retirement accounts and 401(k) accounts
for workers.
The Republicans are enthusiastic about the tax measures for
the fall campaign.
Bush, the GOP presidential nominee, said he would
have signed both the marriage penalty relief bill and the repeal of the estate
tax. The so-called death tax in many cases forces small companies and family
farms to go out of business, a Bush spokesman said Thursday.
Gore, the
Democratic presidential nominee, believes the Republican bill is "a massive tax
cut that benefits the wealthiest most and keeps us from eliminating the national
debt and making smart investments to help middle-class families," a campaign
spokesman said.
Gore and congressional Democratic candidates are making
the argument that the country doesn't need the major tax cuts offered by the
GOP. Instead, the Democrats are promoting smaller tax cuts, reductions in the
national debt and expanding some federal spending programs--such as a new
prescription drug benefit under Medicare in addition to new
government-subsidized retirement savings accounts for poor people.
The
veto override vote on the estate tax measure could come as early as next
Thursday.
In the House, 65 Democrats had joined the GOP majority in June
to vote for gradual elimination of the tax. The vote was 279 to 136, more than
the two-thirds needed to override the veto. But a spokesman for House Minority
Whip David E. Bonior (D-Mich.) expressed confidence Thursday that Democrats will
have enough votes to sustain the president's veto.
The Senate vote in
July, 59 to 39, to abolish the tax fell short of the margin needed to overturn a
presidential veto.
GRAPHIC: PHOTO: President Clinton
explains why he vetoed bill to end the estate tax. PHOTOGRAPHER: Associated
Press
LOAD-DATE: September 1, 2000
